U.S. v. $191,910.00 in U.S. Currency

• Citation: 16 F.3d 1051
• Decision Date: 18 February 1994
• Docket Number: No. 92-15583,92-15583
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. $191,910.00 IN U.S. CURRENCY, Defendant. Bruce R. Morgan, Claimant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1051

16 F.3d 1051

UNITED STATES of America, Plaintiff-Appellant, v. $191,910.00 IN U.S. CURRENCY, Defendant Bruce R. Morgan, Claimant-Appellee.

No. 92-15583.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Aug. 10, 1993.

Decided Feb. 18, 1994.

Sean Connelly, U.S. Department of Justice, Washington, D.C., for the plaintiff-appellant.

David M. Michael, Mill Valley, California, for the claimant-appellee.

Appeal from the United States District Court for the Northern District of California.

Before: REINHARDT and LEAVY, Circuit Judges, and MERHIGE, ^* District Judge.

REINHARDT, Circuit Judge:

This case involves the federal government's increasingly widespread use of civil forfeitures to achieve the goals of criminal law enforcement in what used to be called the "war on drugs." ¹ The government sought to forfeit $191,910.00 seized from claimant-appellee Bruce R. Morgan. The district court granted Morgan's motion for summary judgment on the ground that the government failed to establish probable cause for the institution of forfeiture proceedings, and the government appealed. We affirm.

I.

Morgan's encounter with the law began on March 14, 1990, in the San Diego airport. As Morgan passed through Flight Terminal Security (FTS), the FTS officer operating the X-ray machine observed what appeared to be stacks of currency in his bags. The FTS supervisor asked Morgan if she could look inside his bags. Morgan consented, and the supervisor then removed several envelopes from the bags, and ran them through the X-ray machine again. When she asked Morgan what was in the envelopes, he claimed that they only contained pamphlets or brochures. However, her electronic search revealed that the envelopes contained currency. ²

The FTS personnel allowed Morgan to proceed to the gate with his bags. They then contacted the San Diego Harbor Police, who sent three officers to the gate to investigate. The first to arrive, Officer Jaime Lugo, questioned Morgan for 10 to 15 minutes without placing him under arrest. Morgan told the officer that he was a gemologist and was going to San Francisco to purchase some jade. He stated that he was carrying approximately $20,000 in cash; he said that it was not uncommon for people in the gem business to carry large amounts of cash. Officer Lugo allowed Morgan to board his flight to Oakland.

After telling Morgan he was free to leave, Officer Lugo contacted the San Diego Airport Narcotics Task Force. An officer assigned to the San Diego Task Force, John Fung, proceeded to the airport with a drug-sniffing dog. Agent Fung arrived after Morgan's plane had departed, but he called ahead to the San Francisco International Airport Drug Task Force to inform them that Morgan was suspected of carrying a large amount of U.S. currency and was en route to Oakland. ³ Agent Fung spoke with Brad Buckwalter, a Deputy Sheriff assigned to the task force, and gave him Morgan's flight number, physical description, and a description of his clothing and luggage.

Agent Buckwalter received the phone call from Agent Fung at 11:30 A.M. At the time he received the call, he and Arnold Ginn were the only two agents present in the Task Force office at the San Francisco Airport. Agent Buckwalter instructed Agent Ginn to contact David Robinson and Kevin O'Malley--two other agents assigned to the San Francisco Airport, who both wore beepers--and tell them to meet Buckwalter and Ginn at the Oakland Airport. Robinson indicated that he would come to Oakland, but O'Malley did not. He was busy practicing with the Task Force's drug-sniffing dog in a San Mateo park. ⁴

Agents Buckwalter and Ginn left their San Francisco Airport office at approximately 11:45 in separate cars. They and Agent Robinson got to the airport in time to meet Morgan's flight, which arrived sometime between 12:45 and 1 P.M. The three agents identified Morgan when he got off the plane and followed him as he claimed his baggage and left the terminal. As Morgan headed for a car rental lot across the street, Agents Buckwalter and Ginn approached him, while Agent Robinson remained in the background. Agent Buckwalter showed his credentials, identified himself as a police officer, and asked if Morgan would answer a few questions. Morgan indicated that he would. In response to their questions, Morgan told the agents that he was a gemologist and had an appointment with a gem dealer in Pleasant Hill to purchase gems for some clients in San Diego. He declined to name the clients or the gem dealer, however. Morgan told the agents that he was carrying about $15,000 for his business. The agents asked him if they could take a quick look in his bags, and he consented.

Morgan was carrying three bags: a suitcase, a flat portfolio case, and a hard-sided case apparently resembling a salesperson's sample case. The agents opened the suitcase, but determined that it only contained pieces of clothing. When they opened the portfolio case, they found two sealed manila envelopes. Morgan stated that these envelopes contained brochures. Finally, the agents opened the hard-sided case. The agents asked Morgan what was in the case, and he told them that it contained his money. He lifted up a sealed manila envelope which was stamped and addressed to an attorney and told them that the envelope contained the $15,000. Morgan then said the true amount of the money might be $20,000. Agent Buckwalter asked Morgan whether the money belonged to him. Morgan initially said that the money belonged to his client from San Diego, but then said that actually some of the money belonged to him and some belonged to the client, although he did not say how much belonged to each person. When asked why the money was sealed in an envelope addressed to an attorney, Morgan replied that he intended to send his attorney whatever money he did not spend in his meeting in Pleasant Hill. In response to Agent Buckwalter's questioning, Morgan stated that he had gotten his portion of the money from savings, although he was not sure when he had withdrawn it. ⁵

Agent Buckwalter asked to open the manila envelopes in the portfolio case, but Morgan withdrew his consent to the search. Believing he had reasonable suspicion to detain the bags, Agent Buckwalter told Morgan that he was going to hold the bags for further investigation, including a sniff by a drug-sniffing dog. At approximately 1:15 P.M., Agent Buckwalter seized the three bags. He gave Morgan a receipt for them and listed two phone numbers Morgan could call to determine their status. Agent Buckwalter told Morgan that he was free to leave or accompany the bags, and Morgan chose to leave.

After Morgan left, Agent Ginn contacted Agent O'Malley to arrange for the dog sniff. Agent O'Malley, who had completed his training session with the dog, was in San Mateo, across the bay from Oakland. The agents agreed to meet at the Task Force office in Belmont, which is also in San Mateo County. They chose this location because the dog was located closer to the Belmont office than to the Oakland or San Francisco Airports.

Agents Buckwalter and Ginn then drove to Belmont from the Oakland Airport, although they stopped briefly at the San Francisco Airport to allow Agent Ginn to drop off his car. All of the agents arrived at approximately the same time, and, at about 3:20 P.M., the dog sniff occurred. ⁶ After the dog "alerted" to Morgan's carry-on bags, the agents sought and received a warrant to search the bags. They searched the bags later that day and found six envelopes containing a total of $191,910.00.

On May 1, 1990, the government filed a complaint seeking forfeiture of the $191,910.00, claiming that the money represented the proceeds of narcotics transactions. See 21 U.S.C. Sec. 881(a)(6). ⁷ Morgan filed a verified claim for the money on May 18, 1990. Following discovery, the district court on August 5, 1991 denied the government's motion to dismiss for lack of standing. United States v. $191,910 in U.S. Currency, 772 F.Supp. 473, 474-75 (N.D.Cal.1991). The court also denied Morgan's motion to suppress all evidence resulting from the San Diego airport search as fruits of an overbroad administrative search, id. at 475-76, as well as his motion to suppress on the ground that the questioning outside the Oakland Airport constituted an illegal arrest. Id. at 476-77. The court, however, granted Morgan's motion to suppress all fruits of the luggage detention, holding that its length was excessive and that the agents failed to act with diligence to obtain a quick dog sniff. Id. at 478-80.

Claiming that the government had failed to show probable cause for the institution of forfeiture proceedings, Morgan then moved for summary judgment. ⁸ On February 7, 1992, the district court granted Morgan's motion. The government's timely appeal followed. On appeal, the government argues that the district court erred by (1) denying the government's motion to dismiss for lack of standing; (2) suppressing the results of the dog sniff test; (3) suppressing evidence of the large amount of money seized; and (4) failing to consider, in determining whether probable cause existed, evidence the government acquired after it instituted this action. The district court had jurisdiction pursuant to 28 U.S.C. Secs. 1345 and 1355. We have jurisdiction pursuant to 28 U.S.C. Sec. 1291. ⁹

II.

To have standing to challenge a forfeiture, a claimant must allege that he has an ownership or other interest in the forfeited property. United States v. $122,043.00 in United States Currency, 792 F.2d 1470, 1473 (9th Cir.1986). The government argues that Morgan did not have standing, and that the district court therefore erred in denying its motion to dismiss. We agree with the district court that Morgan claimed a sufficient interest to challenge the forfeiture. ¹⁰

In order to contest a forfeiture, a claimant need only have some type of property interest in the forfeited items. This interest...